Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL
RELEASE
THIS SEPARATION AGREEMENT AND GENERAL
RELEASE (“Agreement”) is made and entered into by and
between Randolph C. Kohn (“Executive”) and Coastal
Banking Co., a South Carolina corporation (“Coastal”),
and Lowcountry National Bank, a national bank (“LNB”;
collectively, Coastal and LNB are the
“Employer”).
STATEMENT OF
FACTS
Executive has been employed as an officer
and employee of the Employer pursuant to the terms of that certain
employment agreement by and among the parties dated April 6, 2005
(the “Employment Agreement”). Executive desires
to accept the following agreements, including, without limitation,
certain additional consideration from Employer in return for
Executive’s general release set forth below. Executive
and Employer desire to settle fully and finally all differences and
disputes between them, including, but in no way limited to, any
differences and disputes that might arise, or have arisen, out of
Executive’s employment with and separation from Employer and
Executive’s resignation from the Employer.
STATEMENT OF
TERMS
In consideration of the mutual promises
herein, it is agreed as follows:
1.
Non-Admission of
Liability .
Neither this Agreement nor
Employer’s offer to enter into this Agreement shall in any
way be construed as an admission by Employer that it has acted
wrongfully with respect to Executive or any other person, or that
Executive has any rights whatsoever against Employer.
Employer specifically disclaims any liability to or wrongful
acts against Executive or any other person, on the part of itself,
its shareholders, officers, directors, employees, agents or
representatives.
2.
Resignation of
Employment .
Executive acknowledges, understands
and agrees that (a) Executive resigned from his employment with,
and as an officer of, Employer and all affiliated entities on April
30, 2008 (the “Separation Date”), (b) Executive
tendered his resignation as a director of Coastal which was
accepted by Coastal on the Separation Date, and (c) Executive
tendered his resignation as a director of LNB on the Separation
Date and that LNB intends to accept such resignation on the date
the consolidation of LNB and First National Bank of Nassau County
is effective, but may accept such resignation earlier at its
discretion. The parties agree that except as set forth
herein, this Agreement terminates all aspects of the relationship
between them.
3.
Consideration
. In full consideration and as material
inducement for Executive’s signing of this Separation
Agreement and General Release, the receipt, adequacy and
sufficiency of which are hereby acknowledged:
(a)
Base Salary Continuation
. Following the Separation Date,
Employer will pay the Executive $400,000 in twenty-four
substantially equal monthly installments payable as of the last
business day of each month, beginning on May 30, 2008.
(b)
Pro Rata 2008 Bonus
. Employer will pay the Executive
on May 30, 2008 a lump sum amount of $31,667, representing the pro
rata portion of his 2008 annual bonus earned through the Separation
Date.
(c)
COBRA Subsidy . Employer will subsidize the Executive’s
monthly cost of COBRA health continuation coverage for a period of
eighteen (18) months immediately following the Separation Date;
provided the Executive timely elects such coverage and timely pays
his portion of the monthly cost of such coverage. The amount
of the monthly subsidy to be paid by the Employer will be $520 and
the Employer shall remit the amount directly to the insurance
company providing the coverage.
(d)
Life Insurance . Employer will pay the next annual premium
that becomes due and payable after the Separation Date on the life
insurance policy issued by Valley Forge Life Insurance Company as
policy number VICR009962 on the life of the Executive. The
scheduled amount of that annual premium payment is $5,775.
Such annual premium payment is conditioned upon the Employer
continuing to be named as a beneficiary of fifty percent (50%) of
the death benefit proceeds under the policy for the duration of the
period of coverage paid for by that annual premium payment.
Executive agrees to execute any ancillary documentation
reasonably determined to be necessary by the Employer to secure its
beneficial interest in the policy.
(e)
Consideration for Loss of Disability
Coverage .
Executive’s participation under the Employer’s
long-term disability plan will cease as a result of his
resignation. As consideration for the loss of such coverage,
Employer will pay the Executive $72 per month, payable as of the
last business day of each month, for the twelve (12)-month period
immediately following the Separation Date.
(f)
Title to Automobile
. As of the Separation Date,
Employer shall convey to the Executive the title to the automobile
that he has been provided for use during his employment with the
Employer under Section 4(d) of the Employment Agreement.
(g)
Paid Time Off . The Employer will pay the Executive a lump
sum amount of $8,333 on May 30, 2008 representing the unused
portion of his 2008 annual paid time off as of the Separation Date.
All legal deductions and required
withholdings will be taken from the consideration set forth
above.
4.
Complete Release
. As a material inducement to the parties to
enter into this Agreement, Executive hereby irrevocably and
unconditionally releases, acquits and forever discharges Employer
and each of Employer’s stockholders, officers, directors,
employees, successors, assigns, agents, representatives, attorneys,
and all persons acting by, through, under or in concert with any of
them (collectively “Released Parties”), from any and
all charges, complaints, claims, liabilities, obligations,
promises, agreements (excluding this Agreement itself),
controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts, and expenses of any nature
whatsoever, known or unknown, suspected or unsuspected, including,
but not limited to, rights arising out of alleged violations or
breaches of any contracts, express or implied (including the
Employment Agreement), or any tort, or any legal restrictions on
Employer’s right to terminate employees, or any federal,
state or other governmental statute, regulation, or ordinance,
including, without limitation: (1) Title VII of the Civil
Rights Act of 1964, as amended by the Civil Rights Act of 1991; (2)
the Americans with Disabilities Act; (3) 42 U.S.C. §
1981; (4) the Age Discrimination in Employment Act, as amended
by the Older Workers Benefit Protection Act; (5) the Equal Pay
Act; (6) the Employee Retirement Income Security Act
(“ERISA”); (7) Section 503 of the Rehabilitation
Act of 1973; (8) the False Claims Act (including
2
the qui tam provision thereof); (9) the
Occupational Safety and Health Act; (10) the Consolidated Omnibus
Budget Reconciliation Act of 1986 (“COBRA”); (11)
intentional or negligent infliction of emotional distress or
“outrage”; (12) interference with employment
and/or contractual relations; (13) wrongful discharge;
(14) invasion of privacy; (15) assault and battery;
(16) defamation; (17) whistleblowing; and (18) violation of
any other legal or contractual duty arising under the laws of the
state of Georgia, South Carolina or the United States of America,
(individually the “Claim” and collectively the
“Claims”), which Executive now has, owns or holds, or
claims to have, own or hold, or which Executive at any time
heretofore had, owned or held, or claimed to have, owned or held,
against each or any of the Released Parties at any time up to and
including the date of execution of this Agreement.
The parties specifically agree that this
release does not cover, and Executive expressly reserves,
indemnification rights existing to him as a current or former
director and/or officer of Employer under the Articles and Bylaws
of the Employer and pursuant to applicable state law and in
accordance with any D&O policy existing for former officers and
directors of Employer.
5.
Cessation of Authority
.
(a)
Executive acknowledges, understands and
agrees that following the Separation Date, Executive is not
authorized to incur any expenses, obligations or liabilities, or to
make any commitments on behalf of Employer, except as provided in
subsection (b). Executive agrees to submit to Coastal’s
Chief Executive Officer, Michael Sanchez, within three days of the
Separation Date, any and all expenses that were incurred by
Executive on behalf of Employer prior to the Separation Date (which
have not previously been reimbursed) and any and all contracts or
other obligations entered into by Executive on behalf of Employer
prior to the Separation Date (which have not previously been
disclosed), including but not limited to any loans agreed to or
memoranda of understanding entered into on behalf of the Employer.
Employer agrees to reimburse Executive for reimbursable
expenses incurred by Executive through his Separation Date which
have not yet been reimbursed within sixty (60) days following the
Separation Date and which are promptly submitted to Employer within
(30) days following the Separation Date. Any expenses
submitted to the Employer more than thirty (30) days following the
Separation Date shall not be eligible for reimbursement, except as
provided in subsection (b). Except as provided in subsection
(b), reimbursements provided for in this Section 5(a) shall
otherwise be processed pursuant to Employer’s standard
policies and procedures relating to reimbursement of expenses. In
no event shall any reimbursement under this Section 5(a) be
paid after the last day of the taxable year following the taxable
year in which the expense was incurred, nor shall the amount of
reimbursable expenses incurred in one taxable year affect the
expenses eligible for reimbursement in any other taxable year.
The right to a reimbursement or an in-kind benefit under this
Section 5(a) will not be subject to liquidation or exchange
for another benefit.
(b)
To the extent Executive incurs expenses
in his capacity as a director of LNB up until the date such board
of directors accepts his resignation as a director of LNB, such
expenses shall only be reimbursed if such expenses are approved for
reimbursement by the board of directors of LNB. All expenses
elig
